An analysis of eco-efficiency in energy use and CO₂ emissions in the Swedish service industries

This study determines the trends in energy efficiency and CO₂ emissions of the Swedish service sector using data at the 2-digit level of aggregation for the Swedish service industry over the period 1993-2008, this empirical study examines eco-efficiency in terms of energy efficiency and CO₂ emissions based on a number of models. The results show that Swedish service industries increased energy consumption and CO₂ emissions during the sample period, whereas energy and CO₂ emission intensities have shown a decrease in recent years. Eco-efficiency models based on the Malmquist data envelopment analysis model suggest that Swedish service industries have an excellent potential to increase energy efficiency and reduce CO₂ emissions. Second-stage panel data techniques show that energy taxes, investments and labour productive have a significant and positive influence on energy and CO₂ emission intensities implying that increasing these variables lead to higher energy efficiency and lower CO₂ emission intensity. This analysis demonstrates the importance of designing and applying adequate energy policies that encourage better energy use and management in this industrial sector for the goal of achieving a low carbon economy.